A Study On The External Validity Of Resolutions Of Limited Liability Companies In China

The issue of external effects of the company’s resolution refers to whether and how the effects of the company’s external civil juristic acts will be affected when the resolution is defective.This issue requires consideration of many factors,such as the interests of the company,the interests of shareholders,the stability of internal and external relations of the company,and the trust interests of external counterparts.The existing rules for the external effect of corporate resolutions in China are not perfect.At the level of legal application,existing norms lack provisions on the definition of "good faith" of the counterparty and the effect of external civil legal acts when the counterparty is not in good faith.In addition,the trust protection path adopted by the existing regulations cannot properly and comprehensively solve the problem of the external validity of corporate resolutions under different resolution matters.This thesis adopts a typological approach to classify and study the external validity of resolutions of limited liability companies.In the process of classification,factors such as the type of resolution defects,the content of the resolution,and differences between statutory and intended resolutions are considered.Multiple classification methods are adopted,including varying external effects of invalid resolutions,invalid resolutions and revocable resolutions,external effects of transaction resolutions vis-a-vis external effects of organizational structure change resolutions,statutory resolutions and voluntary resolutions.On this basis,cases related to the external effect of resolutions of limited liability companies are retrieved,and through the summary and analysis of judicial opinions,this thesis discovers and analyses the reasons for the low invocation rate of the existing rules on the external validity of resolutions,as well as the divergence of opinions on the external validity of resolutions of changes in the corporate organizational structure.This thesis proposes suggestions for improving the rules on the external validity of resolutions of limited liability companies in light of the problems at the level of legal norms and reflections on practical opinions.When the resolution is invalid,the civil legal actions taken by the company pursuant to the invalid resolution are also illegal and invalid.When the resolution can be revoked or the resolution is not established,a further distinction should be made between corporate transaction resolutions and corporate organizational structure change resolutions.The external validity rules of corporate transactional resolutions still apply the trust protection path adopted by the existing norms,and the review obligations of counterparties differ depending on the statutory resolution matters and the intended resolution matters.For statutory resolution matters,the counterparty has the obligation to reasonably review the resolution.For matters of intentional resolution,the review obligation of the counterparty can refer to the UK’s indoor management rule.The counterparty is not obliged to actively consult the articles of association.Even if the counterparty knows that the articles of association stipulate the resolution procedures for specific matters,they can still infer that the company has fulfilled all required internal procedures.The non-authorized agency rule of Article171 of the Civil Code can be applied by analogy when the counterparty with whom the company conducts transactions is not bona fide.The trust protection path and relating rules do not apply to the external effectiveness of company resolutions seeking to alter organizational structures.The impact of defected short-term and long-term confirmation resolution on the company’s organizational structure alterations should be distinguished after the registration is completed.